The events of 2020 and so far in 2021 have provided quite a shock to the economic system. Let us call it what it has been which is a depression. It may for some be a speeded up one but others such as Italy and especially Greece had never really recovered from the credit crunch one so it is another feature in their lost decade. The policy response and the hoped for bounce back pose a lot of questions? Today I intend to look at the inflation issue. Where Does It Come From? Both versions of economic policy have been applied with full force. If we start with monetary policy we see a world of ZIRP ( Zero Interest-Rate Policy) and in some places NITP ( N = Negative) plus a whole swathe of bond and asset buying under the QE banner. This has meant that the money supply has surged. For example on the UK the measure of broad money M4 is growing at an annual rate of 15%. Monetarist theory suggests that goes into nominal GDP and as growth will not be 15% there will be an inflationary push. With the swings in the economy it is hard to have any precision as where do you start from?